ASSIGNMENT ON INTEGRATED MARKETING COMMUNICATIONS AND PROMOTIONAL ACTIVITIES OF HINDUSTAN UNILEVER LIMITED (HUL)-SHAMPOO CATEGORY

SUBMITTED BY ABHISHEK GAJARA(C-55) MAYANK PUROHIT(C-57)

SUBMITTED TO PROF BALYAN

1) Introduction to HUL
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company with a heritage of over 75 years in India and touches the lives of two out of three Indians. HUL works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and good for others. With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the Company is a part of the everyday life of millions of consumers across India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds, Vaseline, Lakm, Dove, Clinic Plus, Sunsilk, Pepsodent, Close-up, Axe, Brooke Bond, Bru, Knorr, Kissan, Quality Walls and Pure it. The Company has over 16,000 employees and has an annual turnover of around Rs. 21,736 crores (financial year 2011 - 2012). HUL is a subsidiary of Unilever, one of the worlds leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of about 46.5 billion in 2011. Unilever has about 52% shareholding in HUL.

Our history
In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it began an era of marketing branded Fast Moving Consumer Goods (FMCG). Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937. In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 52.10% equity in the company. The rest of the shareholding is distributed among about 360,675 individual shareholders and financial institutions. The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972 and in 1977 Lipton Tea (India) Limited was incorporated. Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold through an international acquisition of Chesebrough Pond's USA in 1986.

Since the very early years, HUL has vigorously responded to the stimulus of economic growth. The growth process has been accompanied by judicious diversification, always in line with Indian opinions and aspirations. The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in HUL's and the Group's growth curve. Removal of the regulatory framework allowed the company to explore every single product and opportunity segment, without any constraints on production capacity. Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1996, HUL and yet another Tata company, Lakm Limited, formed a 50:50 joint venture, Lakm Unilever Limited, to market Lakme's market-leading cosmetics and other appropriate products of both the companies. Subsequently in 1998, Lakm Limited sold its brands to HUL and divested its 50% stake in the joint venture to the company. HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents the largest manufacturing investment in the Himalayan kingdom. The UNL factory manufactures HUL's products like Soaps, Detergents and Personal Products both for the domestic market and exports to India. The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group and the Dollops Ice-cream business from Cadbury India. As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond. Then in 1994, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the company entered into a strategic alliance with the QualityIce-cream Group families and in 1995 the Milk food 100% Ice-cream marketing and distribution rights too were acquired. Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two companies had significant overlaps in Personal Products, Specialty Chemicals and Exports businesses, besides a common distribution system since 1993 for Personal Products. The two also had a common management pool and a technology base. The amalgamation was done to ensure for the Group, benefits from scale economies both in domestic and export markets and enable it to fund investments required for aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HUL, thereby beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of the company's wheat business. In 2002, HUL acquired the government's remaining stake in Modern Foods. In 2003, HUL acquired the Cooked Shrimp and Pasteurized Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Products exports. HUL launched a slew of new business initiatives in the early part of 2000s. Project Shakti was started in 2001. It is a rural initiative that targets small villages populated by less than 5000 individuals. It is a unique win-win initiative that catalyses rural affluence even as it benefits business. Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages across 15 states and reaching to over 3 million homes. In 2002, HUL made its foray into Ayurveda health & beauty centre category with the Ayush product range and Ayush Therapy Centres. Hindustan Unilever Network, Direct to home business was launched in 2003 and this was followed by the launch of Pure it water purifier in 2004. In 2007, the Company name was formally changed to Hindustan Unilever Limited after receiving the approval of shareholders during the 74th AGM on 18 May 2007. Brooke Bond and Surf Excel breached the Rs 1,000 crore sales mark the same year followed by Wheel which crossed the Rs.2, 000 crore sales milestone in 2008. On 17th October 2008, HUL completed 75 years of corporate existence in India. In January 2010, the HUL head office shifted from the landmark Lever House, at Back Bay Reclamation, Mumbai to the new campus in Andheri (E), Mumbai. On 15th November, 2010, the Unilever Sustainable Living Plan was officially launched in India at New Delhi. In March, 2012 HULs state of the art Learning Centre was inaugurated at the Hindustan Unilever campus at Andheri, Mumbai. In April, 2012, the Customer Insight & Innovation Centre (CiiC) was inaugurated at the Hindustan Unilever campus at Andheri, Mumbai

2) Current Position in the Market

Hindustan unilever limited (HUL) is currently 1st in the FMCG Market & Is leader since last few years

3) COMPETITORS
Procter & gamble, ITC, Dabur, Godrej consumer, Dabur India, Colgate, Marico, emami, gillete India

4) Company Operations
The company has operations in fmcg sector with brands in homecare, personal care, food & drink, water purifier. But here we will consider only shampoo category. Its parent company unilever has operations worldwide with its subsidiaries in different countries in the name of local country E.g: In India-Hindustan unilever limited, In Pakistan-Pakistan unilever limited etc. In shampoo category, it has four brands in its arsenal of shampoo-dove (premium), Sunsilk, clinic plus (economy) & clinic all clear

4) Promotional methods
Hul promote it Brands throughstreet intercept whereby sales men of Hul display the product to customers its working,functions, benefitetc. Hul also uses ads heavily& also spends heavily on them so as to maintain top of mind awareness in consumers for its products Direct marketing Hul is also leader in direct marketing where it constantly towards its internet users heavily through e-mail,social media ads likeFacebook, twitteretc. At sometimes it organizes campaigns to test new product launches by selecting some test markets, simulation of environment in retails Personal selling Sales force of Hul also interacts directly with customers in malls, streets, retail outlets etc.& explain them about their products as Hul is leader & giant in fmcg category with lots of money & widespread sales force who caters their business Heavy advertising Hul has acquired many slots in leading channels including serials, sports, moviesetc. At some channels like manoranjan, star channels, daily soaps channels etc. It has acquired all or mostly all slots to continuously bombardconsumers with their ad Outdoor media Hul also promotes its brands through outdoor media like banners, posters in retail outlets at prime locations like highways, near malls etc. Health and Beauty services such asLakm Salons provide specialized beauty services and solutions, under the recognized authority of the Lakm brand. The Ayush Therapy Centres provide easy access to authentic Ayurvedic treatments and products.Project Shakti HUL's partnership with Self HelpGroups of rural women. Started in 2001, ProjectShakti has already been extended to about 50,000villages in 12 states Andhra Pradesh, Karnataka,Gujarat and others.Hindustan Unilever Network (HUN) is thecompany's arm in the Direct Selling channel. It presents a range of customized offerings in Home& Personal Care and Foods. HULalso deals in providing vendingmachines for hot beverages like tea and coffee.HULs alliance with Pepsi Co. has significantlystrengthened the channel.

5) Hindustan unilever Limited Last 5 years Performance

Particulars Liabilities
Share Capital Reserves & Surplus

Mar'12 12 Months
216.15 3,296.11

Mar'11 12 Months
215.95 2,417.30

Mar'10 12 Months
218.17 2,364.68

Mar'09 12 Months
217.99 1,842.85

Dec'07 12 Months
217.75 1,220.82

Net Worth
Secured Loans Unsecured Loans

3,512.93
0.00 0.00

2,633.92
0.00 0.00

2,583.52
0.00 0.00

2,061.51
144.65 277.30

1,439.23
25.52 63.01

TOTAL LIABILITIES

3,512.93

2,633.92

2,583.52

2,483.45

1,527.76 Assets

Gross Block (-) Acc. Depreciation

3,574.67 1,416.88

3,759.62 1,590.46

3,581.96 1,419.85

2,881.73 1,274.95

2,669.08 1,146.57

Net Block
Capital Work in Progress. Investments. Inventories Sundry Debtors Cash And Bank Loans And Advances

2,157.12
210.89 2,438.21 2,516.65 678.99 1,830.04 1,314.72

2,168.49
299.08 1,260.68 2,811.26 943.20 1,640.01 1,099.72

2,161.44
273.96 1,264.08 2,179.93 678.44 1,892.21 1,068.31

1,606.11
472.07 332.62 2,528.86 536.89 1,777.35 1,196.95

1,521.84
185.64 1,440.81 1,953.60 443.37 200.86 1,083.28

Total Current Assets

Current Liabilities Provisions

6,340.40
5,688.44 1,945.92

6,494.19
6,264.21 1,324.98

5,818.89
5,493.97 1,441.55

6,040.04
4,440.08 1,527.98

3,681.12
4,028.41 1,273.90

Total Current Liabilities NET CURRENT ASSETS

Misc. Expenses

7,634.36 -1,293.96
0.00

7,589.19 -1,095.00
0.00

6,935.52 -1,116.63
0.00

5,968.06 71.98
0.00

5,302.30 -1,621.18
0.00

TOTAL ASSETS (A+B+C+D+E)

3,512.93

2,633.92

2,583.52

2,483.45

1,527.76

One company that has done remarkably well this year surprising the Street has been Hindustan Unilever. Except for 2008, the company had underperformed its peers consistently over the last decade. Despite being the market leader it saw single digit growth in revenue and profit. But things have changed for HUL in past couple of years with Nitin Paranjpe, the CEO and MD of HUL taking over in April 2008. Since then, the stock has risen from Rs 230 levels to Rs 427 now. So what has Paranjpe changed for the company? Paranjpe says he has set goals that are so audacious that, even if they are missed, the performance is still heroic, an Economic Timesreport points out. There is a relentless focus on consumer satisfaction and aggressive cost cutting to hold up both volumes and margins. In the fourth quarter this year, they reported a handsome sales growth of 28 percent, mainly led by higher prices and 10.1 percent volume growth in domestic business. The company improved on operating margins as well with an improvement of 153 bps (100 bps=1 percent) over last year. But will the dream run continue and are the valuations already too high? This quarter was the ninth straight quarter of high single or double digit volume growth and fifth consecutive quarter of double-digit earnings growth which is telling of something that HUL is doing right. Abneesh Roy of Edelweiss writes, HUL is aggressively investing in categories that will pay rich dividends from a 3 5 year perspective. The growth figures can already be seen in personal care segment where volumes have grown by 17 percent in financial year 2012 despite steep competition from multinational players like P&G and LOreal. Sales growth was also strong at 28 percent in the soaps and detergent segment though it was not completely led by volume. HSBC says it is the growth in volumes that will help the stock maintain its valuation in the market. HUL has introduced new products like chicken Soupy noodles under the Knorr brand and five new variants under Quality Walls. But this quarter it has reduced its ad spend by 80 bps over last year to maintain margins. With new products coming in and competition not easing in any way, it will be difficult to keep ad spends low. If ad spends are still kept low, volume growth will have to be closely watched to assess the stocks performance. Input price inflation and volatility has also benefitted the company as there is less aggressive pricing wars and rational pricing here, HSBC points out. So the research firm is factoring in earnings per share growth of 15 percent over the next five years. If volume growth can be sustained, it is unlikely that the market will de-rate the stock. And Paranjpe understands that. The company is continuously working on its distribution channels in rural areas and now has Shaktimans and Shakti ammas in villages to distribute HUL products. No doubt, it still has the

best distribution channel in the country that is hard to beat and is ideal to keep up the volume growth. Finally, there is a fear that once the market starts recovering, FMCG stocks will start suffering as they are essentially defensive in nature. HSBC breaks that myth too in a report in December last year. It writes, An analysis of annual returns for the last 10 years reveals that, barring 2003 and 2007, the FMCG sector produced significantly superior returns in both downturns and upturns, if we exclude broadly in-line performance in 2002, 2006 and 2009. And over a complete cycle FMCG stocks provide much better returns due to low instability and volatility in performance.There is much more in store for Paranjpe to celebrate it seems.

6)Future impact of promotion on business

A clear direction The four pillars of our vision set out the long term direction for the company where we want to go and how we are going to get there:

We work to create a better future every day We help people feel good, look good and get more out of life with brands and services that are good for them and good for others. We will inspire people to take small everyday actions that can add up to a big difference for the world. We will develop new ways of doing business with the aim of doubling the size of our company while reducing our environmental impact. We've always believed in the power of our brands to improve the quality of peoples lives and in doing the right thing. As our business grows, so do our responsibilities. We recognize that global challenges such as climate change concern us all. Considering the wider impact of our actions is embedded in our values and is a fundamental part of who we are.

7) Future of Hul
The 20,000cr fmcg giant feels future to be challenging both in terms of cost, volatility but it tries to counter it with cost discipline and selective price increase. With the development of emerging markets which contribute around half of turnover of global co unilever.with India as the key market which is expected to grow rapidly & also strong position of unilever it is well placed to benefit from this growth also due to rising disposable income and more consumer spending on consumer goods rather than decline in other big ticket luxury items like cars, bike etc.

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